Manufacture of fertilizers and nitrogen compounds

Sector classification and activity Macro-Sector C – Manufacturing NACE Level 4

Code C20.1.5

Description Manufacture of:

• Anhydrous ammonia (CPA: 20.15.10.75)

• Nitric acid (CPA:20.15.10.50) Mitigation criteria

Principle The manufacturing of ammonia and nitric acid is highly carbon-intensive. Therefore, reducing the emissions from the manufacturing activity itself can positively contribute to the mitigation objective.

Mitigation measures are eligible provided they are incorporated into a single investment plan within a determined time frame (5 or 10 years) that outlines how each of the measures in combination with others will in combination enable the activity to meet the threshold defined below actions

Threshold Manufacturing of nitric acid is eligible if the GHG emissions (calculated according to the methodology used for EU-ETS benchmarks) associated to the production processes are lower than the values of the related EU-ETS benchmarks.

As of February 2020, the EU-ETS benchmarks values for the manufacturing of nitric acid are:

• ETS benchmark: 0.302 tCO2e/t²²⁶

Manufacturing of ammonia is eligible if the two following thresholds are met:

• Scope 1 emissions lower than 1 tCO2/tAmmonia and

• Combined CO2 emissions (scope 1 emissions and scope 2 emissions, from electricity consumed) lower than 1,3 tCO2/tAmmonia.

For the calculation of the emissions from the manufacturing process of ammonia, both the steps: production of the intermediate product hydrogen and synthesis of the ammonia are considered. Scope 1 emissions include both emissions.

GHG emissions must be calculated according to the methodology used for EU-ETS benchmarks.

Rationale

226 See page 100 on the GWP used for the benchmark value:

https://ec.europa.eu/clima/sites/clima/files/ets/allowances/docs/gd9_sector_specific_guidance_en.pdf

The manufacturing of ammonia and nitric acid accounts for approximately 23% of emissions coming from the chemical sector.²²⁷ Reducing emissions from the manufacturing processes can positively contribute to the mitigation objective.

The ammonia sector is expected to substantially contribute to GHG emissions reduction, notably by using hydrogen produced from electrolysis.^228229230

During the manufacturing process of nitric acid, the main type of GHG generated is nitrous oxide and by applying the available technologies it is possible to achieve more than 80% of emission reductions.²³¹ The selected metric for nitric acid is the emission factor, in terms of XX GHG emissions per unit of production. The absolute performance approach has been proposed in order to identify the maximum acceptable carbon intensity of the manufacturing process that the activity should comply with in order to be able to substantially contribute to the mitigation objective.

The selected threshold for nitric acid is the ETS product benchmark. ETS product benchmarks reflect the average performance of the 10% most efficient installations in a sector.

https://ec.europa.eu/clima/sites/clima/files/ets/allowances/docs/gd9_sector_specific_guidance_en.pdf https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32011D0278&from=EN

http://eippcb.jrc.ec.europa.eu/reference/BREF/lvic_aaf.pdf

Provisions to determine the benchmarks in the period from 2021 to 2025 and for the period from 2026 to 2030 are included in Art. 10a, paragraphs 2(a) and 2(c) of the Directive 2003/87/EC.

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02003L0087-20180408&qid=1547917622180&from=EN

Do no significant harm assessment

The main potential significant harm to the environment from the production of nitric acid or ammonia production is associated with:

• polluting emissions to air (especially nitrogen oxides (NOx), and ammonia (NH3)) from the production process;

• Vulnerable ecosystems might be damaged by the construction and/or operation of the production facilities.

• the use of water resources for production purposes (especially for cooling processes) in water stressed areas; and

• the generation of hazardous wastes (e.g. spent catalyst material).

227 Energy efficiency and JRC emissions, Perspective scenarios for the chemical and petrochemical industry, JRC (2017), page 12.

http://publications.jrc.ec.europa.eu/repository/bitstream/JRC105767/kj-na-28471-enn.pdf . 228 Page 56,

https://dechema.de/dechema_media/Downloads/Positionspapiere/Technology_study_Low_carbon_energy_and_feedstock_for_the_

European_chemical_industry-p-20002750.pdf

229 The production of hydrogen trough electrolysis using low carbon electricity will be the preferable process in the decarbonized future. Page 64 https://ec.europa.eu/clima/sites/clima/files/docs/pages/com_2018_733_analysis_in_support_en_0.pdf

230 In FORECAST, ammonia is assumed to be produced trough electrolysis with low carbon free electricity. See page 353 https://ec.europa.eu/clima/sites/clima/files/docs/pages/com_2018_733_analysis_in_support_en_0.pdf

231 Page 39, http://publications.jrc.ec.europa.eu/repository/bitstream/JRC105767/kj-na-28471-enn.pdf

(2) Adaptation • Refer to the screening criteria for DNSH to climate change adaptation.

(3) Water • Identify and manage risks related to water quality and/or water consumption at the appropriate level. Ensure that water use/conservation management plans, developed in consultation with relevant stakeholders, have been developed and implemented.

• In the EU, fulfil the requirements of EU water legislation.

(4) Circular Economy

Wastes and by-products, especially hazardous wastes, are managed in line with the BREF for Waste Treatment.

(5) Pollution Ensure polluting emissions to air (e.g. nitrogen oxides (NOx), and ammonia (NH3)) and water are within BAT-AEL ranges set in the BREF LVIC-AAF (Large Volume Inorganic Chemicals - Ammonia, Acids and Fertilisers), the BREF CWW (Common Waste Water and Waste Gas Treatment/Management Systems in the Chemical Sector) and the BREF EFS (Emissions from Storage).

A minimum requirement is the implementation and adherence to a recognised environmental management system (ISO 14001, EMAS, or equivalent).

A stringent level of BAT-AEL is required if an activity materially contributes to local air pollution levels, exceeding air quality standards

(6)

Ecosystems

Ensure an Environmental Impact Assessment (EIA) has been completed in accordance with the EU Directives on Environmental Impact Assessment (2014/52/EU) and Strategic Environmental Assessment (2001/42/EC) (or other equivalent national provisions or international standards (e.g. IFC Performance Standard 1: Assessment and Management of Environmental and Social Risks) – whichever is stricter - in the case of sites/operations in non-EU countries) for the site/operation (including ancillary services, e.g. transport infrastructure and

operations, waste disposal facilities, etc.) and any required mitigation measures for protecting biodiversity/eco-systems, in particular UNESCO World Heritage and Bey Biodiversity Areas (KBAs), have been implemented.

For sites/operations located in or near to biodiversity-sensitive areas (including the Natura 2000 network of protected areas as well as other protected areas), ensure that an appropriate assessment has been conducted in compliance with the provisions of the EU Biodiversity Strategy (COM (2011) 244), the Birds

(2009/147/EC) and Habitats (92/43/EEC) Directives (or other equivalent national provisions or international standards (e.g. IFC Performance Standard 6) – whichever is stricter - in case of sites/operations in non-EU countries) based on the

conservation objectives of the protected area. For such sites/operations, ensure that:

• a site-level biodiversity management plan exists and is implemented in alignment with the IFC Performance Standard 6: Biodiversity

Conservation and Sustainable Management of Living Natural Resources;

• all necessary mitigation measures are in place to reduce the impacts on species and habitats; and

• a robust, appropriately designed and long-term biodiversity monitoring and evaluation programme exists and is implemented.